Standard & Poor's Fund Services has downgraded Perpetual's $6 billion Wholesale Concentrated Equity fund (CEF) to four stars from five on the back of uncertainty over whether head of equities John Sevior will return to his role after his six-month leave of absence.
S&P Fund Services analyst Tom Mills also said Paul Skamvougeras, who will manage the CEF in Sevior's absence, was mainly untested in a large-cap, long-only environment.
"Since Mr Skamvougeras began managing the CEF, its size has been significantly reduced as a result of some redemptions, and largely by institutional clients reallocating their investments to other Perpetual strategies," Mills said.
S&P sparked a stir in May when it placed the fund on hold, telling the financial community of Sevior's plans to take a six-month leave from the start of July and return to Perpetual in January.
"We have removed the fund from 'on hold' and downgraded it based on the lack of certainty that Mr Sevior will resume managing the portfolio and our lower level of conviction in Mr Skamvougeras as manager of the fund," Mills said in a statement.
Skamvougeras' experience is the manager of Perpetual's long/short Australian-equities fund, a smaller, more nimble fund than the CEF, which Sevior has run since inception in 1999.
"While we acknowledge that Mr Sevior may resume management of the fund in January 2012, we note that Perpetual has not ruled out Mr Skamvougeras continuing to manage the fund beyond this date," Mills said.
"Although we consider Mr Skamvougeras to be a very capable investor, we note that his portfolio management experience to date has been in long/short strategies with far lower levels of funds under management."
However, Mills said S&P remained comfortable with Perpetual overall, citing the breadth and depth of its well-experienced team.
